Comments on: Nine Simple Things to Do to Get Ready for Tax Season Right Now!

By: Claudia

Claudia — Fri, 25 Dec 2009 22:35:10 +0000

No Ram you aren’t confused. You would be giving away thousands to save a few hundred. I grit my teeth when people tell me they bought a house or they are not paying off their house ahead of time because of the tax advantage. They pay several thousands of dollars in interest, so they can save a few hundred in taxes. Does not compute! Now, if you could take the donations or interest directly off the amount of tax you owe, that would be a whole different issue!

By: Ram

Ram — Thu, 24 Dec 2009 18:13:38 +0000

I often hear about charity at the end of the year. nothing against it, and i am all for giving to favorite and needy organizations / temples etc, however, from tax perspective how much is it going to make a difference?

I tried my 08 s/w couple of weeks ago for an estimate, i know i owe some money as of now, and working around charity, i don’t see much of a difference in my tax liability, unless i have/willing to give several thousands, which is not likely.

in an hypothetical example i saw on IRS guide, depending on his unique tax constraints, giving about $4000 to charity would save him about $300 or so. so does it mean give away several thousands to save couple hundreds?

I am trying to understand while also considering adding another check to my favorite org.

just my thoughts… just confused…

By: Tammy

Tammy — Thu, 24 Dec 2009 15:37:44 +0000

This is our first round of taxes as business owners, and I’m so scared! I always did my own taxes before, but this year we are using an accountant so we don’t screw it up. We set up a separate tax account for our business and every month we deposit enough to cover our sales taxes and then some. (We don’t have to pay any employees yet, thank God!) Hopefully we will have enough saved up to pay our accountant and pay any tax we still owe.

We’re sitting down on New Year’s Day and trying to get all of our paperwork in order. This is one area we have been sadly lazy on getting organized.

Not to go all anti-government rant on everybody, but I think it sucks that small businesses get whalloped at tax time. Running your own business is supposed to be part of the American dream, right? Paying 15% federal self employment tax just stinks!

By: deRuiter

deRuiter — Thu, 24 Dec 2009 11:12:53 +0000

If you have a business expense coming up early in January, PAY IF BY DECEMBER 31 INSTEAD. That way you can write it off on this year’s taxes and get the deduction a whole year earlier. For instance, if you’re paying a power bill early (business expense) in January, pay it in December and write it off for the April 15 tax filing, instead of having to wait to April 15 2111 to get the benefit. You can do this with postage expenses if you use stamps, packaging supplies, just about anything, PAY IT NOW INSTEAD OF NEXT WEEK.

By: David/Yourfinances101

David/Yourfinances101 — Thu, 24 Dec 2009 09:25:10 +0000

Great post. I would have also put “And one Thing to Do For Next Year’s Taxes”. And that is, start to think about them on january 1. As soon as I got my income taxes into my train of thought throughout the year, my refunds went up and doing them at the end of the year became a breeze.

Get a filing system and save your deductions as you go along.

By: Leah

Leah — Thu, 24 Dec 2009 07:59:25 +0000

I use turbo tax online. If you’re under a certain income threshold (something decently high, like $30k), you can e-file for free and don’t have to pay for using the program. I often do my taxes by hand *and* with the program to see how things shake out. I just fill out an EZ form, but I’ve never had a year where I worked in any less than two states, so it’s good to make sure all my state forms are submitted properly.

By: Rosa Rugosa

Rosa Rugosa — Thu, 24 Dec 2009 01:16:07 +0000

I actually enjoy doing my taxes. I keep very well-organized records (want to see my first-grade report card? I can find it in a flash! OK, maybe I’m mildly insane in the record-keeping department). But in any event, I would say it takes me less than 2 hours, a sheet of paper, a pencil, and a calculator. I have excel and I’m competent with it, but I never felt the need to get any more high-tech with my financial records. Having your records organized and readily accessible in the first place is the key!

By: Kris

Kris — Wed, 23 Dec 2009 21:54:54 +0000

Trent,

Last year, my first year as an independent contractor, I submitted my taxes on the LAST possible day. I didn’t plan on this, it just seemed like a momentous task to gather all my information and calculate my taxes, all while working.

I love your tip on starting early. It’s been on my mind to do so, and now it will be in my Google calendar.

Merry Christmas Trent!

By: marta

marta — Wed, 23 Dec 2009 21:09:56 +0000

Gosh. I am a freelancer, which can be a bit trickier tax-wise, but it generally just takes me one hour to do my taxes. The first time was the hardest, after that I got the hang of it and I often do other people’s taxes for them. I file bills and receipts right away and I generally update my spreadsheets quarterly (at least).

Come tax time, it’s just a matter of opening an Excel document and getting all the figures from there. I rarely have need for the documents issued by third parties (clients, charities, etc), which tend to arrive later than I’d like. I use them mostly to check their numbers against mine.

I am often amazed when I read that in the United States an average person is likely to have to print dozens of pages and mail them. Here you can e-file, but if I printed those forms, I don’t think they’d be more than 10 pages, total.

By: Brent

Brent — Wed, 23 Dec 2009 20:58:02 +0000

I think you accidentally “You don’t want April to arrive “. Other than that, thanks its gotten me thinking about what new changes buying that home is going to do to my taxes.

By: George

George — Wed, 23 Dec 2009 20:21:01 +0000

If one is normally filing the EZ form, then buying software is overkill.

If one needs extra forms, go to irs.gov and download them.

Trent – how about a list of what tax forms people should be expecting?